DES MOINES, Iowa (AP) — U.S. gas prices are changing almost daily, leaving many drivers feeling stressed and financially squeezed. As of Tuesday, the average price for a gallon topped $4, the highest since 2022, according to AAA. These shifts reflect a turbulent oil market, influenced mainly by global events, including the war in Iran.
When the U.S. markets opened Thursday, oil prices spiked. This surge followed President Trump’s announcement that the U.S. would take significant action against Iran, prompting calls for patience from the public. Understanding when to fill up has become a strategic game for drivers, as prices can shift from day to day, or even station to station.
Lonnie McQuirter, who runs 36 Lyn Refuel Station in Minneapolis, noted that wholesale fuel prices are rising frequently, which directly affects what he has to charge. A convenience store a mile off Interstate 35 had regular gas priced at $3.399 a gallon, about 20 cents lower than the metro area’s average.
McQuirter explained, “We set prices based on our fuel costs and what we need to stay in business.” He acknowledged the tight margins and increasing operational costs, including credit card fees. With more customers feeling the pinch, small operators often prioritize empathy over profit. “It’s hard to see customers struggling,” he said. “You feel that pressure.”
What Drives Gas Prices?
Many factors affect gas prices, and most are beyond retailers’ control. Roughly half of what you pay at the pump goes to crude oil costs, with about 20% allotted to refiners. Soaring crude prices, influenced by the war and disruptions in key shipping routes, necessitate price adjustments at gas stations. Taxes—federal, state, and local—account for nearly 20% of your gas bill.
According to the U.S. Energy Information Administration, retailers often have a markup of around 38 cents per gallon. “Some stations earn more, some less,” notes Jeff Lenard from the convenience store trade group NACS. Patrick De Haan at GasBuddy adds that gas station owners have little control over these prices. “They are simply reacting to market conditions,” he explained.
Why Are Prices Different Across Stations?
Even with the national average above $4, prices can differ significantly by region and station. For instance, California has some of the highest gas taxes, around 71 cents, compared to about 9 cents in Alaska. Factors like proximity to refineries, operation volume, and competition shape pricing strategies. Stations near each other may lower prices to attract more customers, hoping they’ll also buy snacks and drinks.
Who Benefits from Higher Prices?
While gas stations sell millions of gallons a day, they often don’t gain much as prices rise. According to expert Garrett Golding from the Federal Reserve Bank of Dallas, “Higher prices can mean lower sales inside the store, especially if customers feel the financial crunch.” Most profits come from upstream companies that extract and refine oil, but even they remain cautious, knowing that continuous price hikes could dampen overall demand.
This situation is similar to previous energy crises. Experts suggest that consumers should brace for fluctuations as long as geopolitical tensions remain high. Historical data indicates that past oil price spikes have often resulted in longer-term behavioral changes in consumer spending.
Understanding these dynamics helps shed light on why you’re paying what you are at the pump. As gas prices continue to rise, staying informed can help you make better choices about when and where to fill up.
For more information on current gas prices and trends, visit [AAA](https://www.aaa.com) or [GasBuddy](https://www.gasbuddy.com).
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Energy markets, Oil and gas industry, Donald Trump, Iran war, Retail and wholesale, General news, MN State Wire, Minnesota, Iowa, IA State Wire, Business, U.S. news, Neal Walters, Lifestyle, Garrett Golding, Patrick De Haan, American Automobile Association, Jeff Lenard, Federal Reserve System, Lonnie McQuirter, Iran government, Iran
